This looks bad…
President Joe Biden has been blaming the highest inflation in nearly four decades on one thing: the supply chain. But, on Thursday, an Obama official dismissed the President’s claims as “totally dishonest” in an opinion piece.
On Thursday, Steven Rattner — counselor to the Treasury secretary under former President Barack Obama — wrote in a New York Times op-ed that Biden had mischaracterized the current once-in-a-generation inflation surge.
In the piece, Rattner wrote that “Supply issues are by no means the root cause of our inflation,” instead Rattner said blaming inflation on the supply chain was “like complaining about your sweater keeping you too warm after you’ve added several logs to the fireplace.”
These remarks refer to comments Biden made in an interview with Lester Holt of NBC News last week, where the President blamed the surge in inflation on globalized pandemic-induced bottlenecks. To substantiate his comments, Biden pointed to the semiconductor shortage, which was delaying the manufacturing of cars and contributing to the 12.2% price hike on vehicle costs.
Biden’s remarks come after CPI data showed that inflation rose to 7.5% in January from a year prior, the greatest increase since February 1982.
While Rattner acknowledged the pandemic affected the supply chain, he contended that the source of inflation was likely consumer demand, spurred on by government spending that included three stimulus payments.
In the piece, Rattner wrote, “It’s a classic economic case of ‘too much money chasing too few goods,’ resulting in both higher prices and, given the extreme surge in demand, shortages.”
In addition to demand rising, what Americans are buying has also changed. Building materials, private vehicles, and electronics top the list compared to spending on entertainment and travel. According to data released by the Department, the purchase of durable goods increased by 25% in 2021 compared to 2020.